Analysis of Cyber Risk Challenges and Insurance Mechanisms

Luojia Ping ()
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Luojia Ping: China Economics And Management Academy, Central University of Finance and Economics

A chapter in Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025), 2026, pp 736-743 from Springer

Abstract: Abstract As the pace of digitalization accelerates, cyber risks such as data breaches, ransomware, and system outages have become significant threats to businesses and society. However, traditional insurance mechanisms provide inadequate coverage against these risks, making cyber insurance an emerging tool for risk management. This paper systematically summarizes the definitions, characteristics, and classifications of cyber risks and insurance based on a review of relevant literature and focuses on exploring the core pathways through which insurance mechanisms address cyber risks, namely risk transfer, risk prevention and control, and industry collaboration. The study points out that the current insurance market faces multiple obstacles. On the one hand, product design and risk suitability are inadequate, making it difficult to cover emerging risks, and ambiguous exclusion clauses lead to claims disputes. Additionally, industry operational mechanisms are constrained, with insufficient actuarial data and information asymmetry exacerbating pricing challenges and adverse selection. Finally, external environmental constraints are significant, with insufficient risk awareness among enterprises leading to low insurance uptake, and cross-border data sovereignty conflicts impacting claims execution. This study aims to provide references for the insurance industry and policymakers to promote the insurance market’s role in safeguarding cybersecurity.

Keywords: Cyber Risk; Cyber Insurance; Risk Transfer (search for similar items in EconPapers)
Date: 2026
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DOI: 10.2991/978-2-38476-585-0_83

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